Philanthropy

Celebrating Philanthropy

Simon Lewis, Head of Strategic Partnerships, Communications & Community, The Trust Company
20th September, 2011

National Gallery of Victoria, Persimmon

I would like to begin by saying what a marvellous privilege it is to address you tonight on the topic of philanthropy and the celebration it duly deserves. As John has said, I have been asked to speak on behalf of The Trust Company, not because of experience, but because of conviction and my recent involvement in shaping our new direction for Philanthropy and Community, which I will outline tonight.

But first, a few words a wise friend shared with me a few days before Jeannine and I married 8 years ago. He said, “The secret to a long and happy married life is to ensure that, over time, you always give more than you take from the relationship”. Like many other wise sayings; 

• It was strikingly simple, on first thoughts, and seemed almost self-evident; if we both were to adopt this principle there would always be some surplus for trying times, or when kids came along, or both...
• After reflection, however, it seemed to emanate from a more general truth, perhaps as a guiding principle to be applied to our relationship with others and our broader community; this would lead to a happier life, as well as a happy wife.

So, as a rule of thumb perhaps, let’s paraphrase this wise saying by as the “More Give, Less Take” principle.

You might recognise this as the current tag line for one of our biggest banks, National Australia Bank. Curious for a Big 4 Bank to choose such a community-minded slogan at a time when its sector is being scrutinised for anti-competitive behaviour and fat profits - not to mention that pesky $1.50 charge at the ATM. Like other banks and corporations, however, NAB has read the public mood and can sense the prevailing fatigue with a self-interested-consumer approach.  Slogans like “why wait, you can have it all – TODAY” seem tired. And so they should. According to the work of Nobel Laureate Herbert Simon, as quoted in Peter Singer’s book A Life You Can Save, ‘social capital’ is now recognised as being responsible for at least 90% of what people earn in today’s wealthy societies. Deterioration in social capital leads to unrest, the likes of which we saw in London recently. Such events shake our confidence that our prosperity project is really working, for everyone that is.

After all, the greater prosperity we enjoy today creates a conundrum for us if unaccompanied by greater happiness. David Malouf, in his recent best-selling essay The Happy Life explains how the word ‘happiness’ seems to have got tangled up with the more modern concept of ‘lifestyle’ than with the more traditional notion ‘of living a virtuous life’.  Malouf goes on to explain how Thomas Jefferson’s formulation of the American Declaration is an example of this misunderstanding. In declaring the ‘pursuit of happiness’ alongside ‘life’ and ‘liberty’ as inalienable rights, a time bomb was set ticking away at the centre of American consumerism. 

A global consumer culture that has proliferated around a less sustainable “More Take, Less Give” principal gets periodically interrupted by a financial crises and crisis talks on the deteriorating environment, global food crises and pandemics, to name a few.
Charles Lowenhaupt is an adviser to family offices in the United States where a billion-dollar philanthropy movement is gathering noticeable momentum, led by the Bill & Melinda Gates Foundation, and taking a stand and finding solutions to these global issues. Charles presented to a group of philanthropists gathered in our Boardroom here in Melbourne recently for a discussion on the topic of Strategic Philanthropy, and tells how he challenges well-heeled American families seeking his advice to get on board. First off, he asks them “What is all the wealth for?” And he repeats the question because it is not the question they were first expecting on minimising tax or maximising returns: “What is all the wealth for?” he asks again. 
Alfred Felton had his answer when diagnosed with cancer just four months before his death in 1904: “Wealth? Get it Spent” he wrote in his diary.

And spend he did, seeding the eponymous bequest with half his estate that dramatically changed the fortunes of the NGV and its art-loving community forever. The conundrum for unhappy or uneven prosperity, I believe, is answered in a deeper sense of personal engagement with and investment in our community. It is answered by philanthropy.

As a young parent living in a foreign land from my country of birth, Zimbabwe, I have only recently come to appreciate the broader importance of “More Give, Less Take” principle.  Like other young parents, the responsibilities of nurturing a young family bring community engagement into sharp relief. “It takes a village to raise a child” goes the old African proverb.  Encouragingly, younger generations of today are not waiting until parenthood to get community focused. Trends in social enterprise, social activism, social capital markets, for example, are largely driven by individuals at university level or the idealists stepping out of commerce for what is now considered a ‘career change’ and not a ‘cop out’. MBA programs report fast growing interest in modules on social impact. So, community, however we choose to define it, is now de rigueur. Estimated to employ 8% of the population by the recent Productivity Commission Report, I would hazard a guess that the community sector is probably the only other major sector growing at double digits, alongside mining, here in Australia.

This is indeed a cause for celebration.

So, with this backdrop, it may come as no surprise that we at The Trust Company have been planning how best to respond to the opportunities ahead and, as trustee, investment manager and service provider, to support and sponsor the ongoing growth of the community sector.
Since our establishment here in Melbourne 126 years ago, we have assumed the enormous privilege and responsibility of managing over 350 charitable trusts in Australia alongside our more traditional responsibilities in Estates and Trusts and the advice and investments afforded to beneficiaries. We expanded from the 1950s into corporate trustee services to help our clients manage their governance, compliance and custodial responsibilities. Since the merger with Guardian Trust earlier this year, the business has expanded considerably in all dimensions. Guardian Trust has a stand-out reputation for philanthropy in New Zealand with over 450 charitable trusts in its portfolio. The Trust Company Group now accounts for over $1bn of philanthropic funds which, each year, accounts for $40m of distributions to the non-profit sector.
However, we required a circuit breaker to allow us to step into a more strategic space in philanthropy. Like the experience of other trustees and foundations, valuable time and resources are tied up in administration of annual funding rounds, for example, in support of a fragmented distribution of short term projects. This only served to further complicate an already diverse business associated with our non-discretionary trusts, and took resources away from building stronger relationships. We were also cognisant of the more general changes in the ‘giving market’ with a shift towards ‘living giving’ through PAFs, the growth of Community Foundations, and Lifestyle Philanthropy associated with online fundraising platforms, for example.

The circuit breaker consists of a few, synchronised steps that we hope further strengthens our relationships in the non-profit space and promotes greater and more discernable social impact for our clients.

Our vision, simply put, is to be the trustee that maximises the enduring social impact for our clients and community.

Under the banner of “Engaged Philanthropy”, the first step is to invest more in building longer-term, strategic partnerships with all our clients and beneficiaries. For our discretionary trusts, this means a move away from small, annual grant funding focused at the project level over the next two years. We will also focus future investment on two major program areas and will soon begin to seed longer-term strategic partnerships in the areas of:

• Positive Ageing – investing in the health and wellbeing of Senior Australians, and
• Socially Inclusive Education – investing in the leadership, learning and skills within disadvantaged and marginalised communities.

These were the best fit against our discretionary trust portfolio and after consideration of a host of other factors. Our largest discretionary charitable trust, established by the late Fred. P. Archer, for example, who left his fortune made on plantations in Papua New Guinea to champion the cause of indigenous education,  clearly influenced our selection of Socially Inclusive Education.
Mindful of what I was saying earlier about the new trends in social markets, and the intention of The Trust Company to participate more actively in promoting the growth and opportunities in this sector, we will also be looking out for organisations that demonstrate real innovation, entrepreneurship and capacity building for the non-profit sector more generally.  

From an Engaged Philanthropy perspective, we also want to expand the client experience beyond the traditional space of charitable trusts. While an important tool in effective estate planning, we want to get greater traction with our investment management services to the non-profit sector. With $1bn already invested in a time-honoured ‘sleep at night’ investment approach for our charitable trusts, we are aware of many philanthropists and non-profit organisations looking for a more optimal investment solution that maximises the tax and franking credit advantages of charitable status alongside cost-effectiveness. There are also a host of other ancillary services we are looking at, such as fundraising and bequest program advice and online fundraising solutions.

As the importance of community regains its place in our social contract, we want to ensure employees of The Trust Company are fully supported in their community initiatives, express their own personal philanthropy and work with our other strategic partners where possible. Our “Community Program” for staff will sponsor community leaders in the business who present a plan to address a community issue important to them. As leaders, we expect them to motivate the followers out on their volunteer day too. From a standing start two years ago, we saw 75% of staff take up their volunteering day last year which is great momentum. At the recent Brain Fitness Challenge Event initiated by Florey Neuroscience Institute and sponsored by the Fred P. Archer Charitable Trust, we had three teams from our Sydney, Melbourne and AUCKLAND office participate and between them, they walked away with 11 of 16 prizes. Clearly the smartest trustee in town! Achieving tangible staff engagement like this ensures our new approach has authenticity and leverage from our staff, and a more engaged and energised workplace.
The link between our Engaged Philanthropy with our clients and strategic partners and our Community Program with our staff will be made by The Trust Company Foundation. We will begin to revamp its visibility and ensure that it offers both the suite of services and accountability to social impact to encourage greater public donations and sub-accounts. Essentially we propose to reposition The Foundation as a symbol of our new approach. The option of opening a sub-fund in The Trust Company Foundation, akin to the Community Foundation model, also presents clients with a turn-key and cost-effective solution invested centrally but with options to both name the sub-fund and express a wish for the use of the funds.

As we explore this new territory, and step out to implement some important changes, there will be five guiding principles that will keep us on course throughout.

• First, we acknowledge that philanthropy is directed by the heart and then best implemented with a strong head and safe hands. Emphasising the importance of relationships is critical to read the philanthropic aspirations of existing and future clients and beneficiaries. On this point, I would like to acknowledge Wendy Brooks, who  joined The Trust Company team over a year ago and been solely focused on philanthropy for the last six months. She is a manifestation of this emphasis of relationships, and has been instrumental in bringing tonight’s event together with the team at NGV. Sadly she has been taken ill, and we sent her a large bunch of flowers today from us all to say ‘thank you’.  Wendy’s role as Head of Business Development, Philanthropy will mean she is your first contact with new ideas and opportunities.
• Second, we invest in deeper, long-term strategic partnerships with all our non-profit partners, including co-trustees, advisory Boards and beneficiaries.
• Thirdly, we want our staff to exhibit their own community sensibilities in the workplace either as a community leader or volunteer and, where possible, to link them with our non-profit partners.
• Fourthly, we lead by example as a trustee company.  This means we need to take some important steps and investment to bring this new strategy to life. The Philanthropy & Community Board was established late last year to oversee our work in this area, and is Chaired by Josephine Sukkar. 

And as an illustration of our new vision for Australia’s most respected literary award, we brought the Miles Franklin Award to Melbourne earlier this year in partnership with the University of Melbourne and the State Library of Victoria. But our special guest tonight, and former Director and Chairman of The Trust Company, Gordon Moffatt, is probably our most noteworthy alumni regarding his example for philanthropy. As you will shortly hear shortly from Gordon, he and his family have seen it as their duty to make Melbourne a prosperous and vibrant place, and have always been at the service of their city. Amongst a host of other community and non-profit appointments, such as Deputy Mayor and Chair of the Lord Mayor’s Charitable Fund, his family’s philanthropy towards the NGV in particular has been memorialised in the name of his mother, Charlotte Moffatt. It is also important to note that, while a Director at The Trust Company, Gordon was instrumental in setting up The Trust Company Foundation. Gordon and his wife Jackie’s continued engagement with their community and support of our Company make them leaders of our “More Give, Less Take” principle.

We also take a moment to remember Eugenie Crawford, a volunteer here at the NGV and a friend of Gordon’s mother, Charlotte, who requested in her will that The Trust Company establish a trust fund in the name of “The Eugenie Crawford Bequest”. Clearly touched by Paris in her travels, she requested her trustee to pay the income to the NGV to acquire paintings by artists of the School of Paris between 1920 and 1970, and those European artists directly related or influenced by it. Since her death in 1995, her trust has assisted acquisitions at the NGV worth well over $1m at purchase price.

• Finally, after all is said and done, we want to account for the social impact we create as an organisation. It is also our intention to bring an independent university team with a social impact discipline alongside us as trustee to measure the social impact we generate along the way.

In closing, I would like to thank the broader team that came together to develop this new approach over the last few months.
And I would like to thank you all for joining us this evening in your capacity as Philanthropists, a ‘moniker’ you all share in some way with each other. As leaders and change agents in the philanthropic community, you have a unique influence to catalyse social change in community sectors dear to you, acting on your own compassion and inspiring others to discover their own philanthropy. The Trust Company will be there alongside you, doing the same.
I would now like to invite our special guest, Gordon Moffatt, to address you. Our Chairman, Bruce Corlett, will then offer him a vote of thanks.

Thank you.